Lisa Su is now CEO of AMD

[Despoiler]

If Rory was a turn around specialist then his tenure at AMD failed, because he is being ousted before turn around is completed. His tenure at Lenovo was about turn around, he reinvented the business and when he left he had a strong growth track record to show, with AMD he cannot say the same, to the point stock is in even worse shape than it was when he took over.

You should probably read Anandtech's write up.

http://www.anandtech.com/show/8606/amd-appoints-lisa-su-as-president-ceo-rory-reed-steps-down

 

[krumme]

Thread title "Lisa Su is now CEO of AMD"
Maybe this thread doesn't quite fit into "CPUs and Overclocking".

Still, it would be nice to focus more on the management structure and the implications of this 'transition' rather than breakdowns of AMD and Intel semiconductors.
[Which are already discussed as nauseum at least once a week]

FWIW...

Agree. In connection with that i would like you guys take on what the retructuring plan should be about?

 

[Elixer]

I see her as a great candidate, no question, but she needed time to gain the skills that are necessary to become a leader across the board as is needed for the CEO. At the young age of 44, I hope she has been given those opportunities. Otherwise she has been setup to fail which is no good for her career or that of the company.

Problem is, she has no track record like her predecessor for running huge companies. This is why AMD's stock is down almost 11% right now.
She might know the tech more, but, that don't mean she knows how to run a business.

 

[Phynaz]

Intel's Mobile and Communications Group not only (to my knowledge) spends its R&D money on developing the low-power Atom cores, but it also does the following:

- Various SoCs for mobile applications (Merrifield, Moorefield, SoFIA, Broxton, etc.); Intel needs an entire pipeline of SoCs targeted for the applications it's aiming to participate in.
- Processor IP development for mobile. Intel needs to develop IP such as image signal processors, low power CPUs, low power GPUs, video encode/decode blocks, and so on.
- Cellular/connectivity IP. Unlike AMD, Intel needs to have an entire pipeline full of cellular basebands, RF chips, in addition to various other connectivity blocks (Wi-Fi is a good example).

Qualcomm's company-wide R&D spending totals about $5 billion, with likely most of it going towards mobile chip development. It's not a surprise, then, that Intel needs to spend several billions of dollars per year in order to try to catch up.

Does Intel cross-charge / amortize process development costs to product groups? That could be an easy $1B right there.

 

[Phynaz]

Yeap, but the boot here is the billions of ARM processors sold every year. Intel already started feeling the boot weight on its shoulders and trying to react by buying its way in to the ARM market. Lets see how dip in the pocket they are willing to put their hands on and bleed Billions each year just to get mobile market share.

Intel's pockets are immensely deeper than AMD's. How will AMD survive?

 

[mrmt]

Does Intel cross-charge / amortize process development costs to product groups? That could be an easy $1B right there.

Cross charging in this case. Intel process R&D is OPEX and is distributed accross the segments, same with depreciation/amortization from the fabs.

 

[krumme]

Problem is, she has no track record like her predecessor for running huge companies. This is why AMD's stock is down almost 11% right now.
She might know the tech more, but, that don't mean she knows how to run a business.

What?? When was Meyers, RR and Sanders running huge companies before they got the ceo position at Amd?

When stock price is down (it have happened before in amd history btw) my take it is because of lower expectations for financial results. Not because Meyers ran some huge secret alien organization prior to amd position and Lisa have not.

 

[mrmt]

What?? When was Meyers, RR and Sanders running huge companies before they got the ceo position at Amd?

When stock price is down (it have happened before in amd history btw) my take it is because of lower expectations for financial results. Not because Meyers ran some huge secret alien organization prior to amd position and Lisa have not.

Well, her first C-level position at AMD and it was only for for 4 months at AMD, and she's also fairly young. As bright as she might be, I can't but see this as a risky proposition for AMD, but again, I don't think there are many people lining up for the position. They took a lot of time to find Rory Read, now with the financial situation stabilized but at the same time more deteriorated, to find a new CEO would be even harder.

 

[GRAFiZ]

It's really all about Q3 earnings... seriously, putting aside some of us and our emotional attachement to AMD products, it's really all about performance.

We will know soon enough, if AMD announces earnings growth, things will be fine, if AMD announces a loss of any amount... stick a fork in them, they're done. I would anticipate bankruptcy protection by years end.

The reality of business is harsh, a lot of really great companies with really smart employees just lose direction, focus and their stability. AMD is headed towards a pretty serious fork in the road, one way will take them to the promise land. The other will take them to a junkyard full of Sears catalogs, VHS tapes from Blockbuster, and hard back books from Barnes and Nobles.

Oh yes, all too often, a company that once seemed impossible to fail can quickly become nothing but a memory from our youth.

Good luck to Lisa Su, she will need it, along with a lot of fair winds blowing the dust of prosperity.

 

[Elixer]

We will know soon enough, if AMD announces earnings growth, things will be fine, if AMD announces a loss of any amount... stick a fork in them, they're done. I would anticipate bankruptcy protection by years end.

Of course it will be a loss, the only thing that is really selling well for AMD is the PS4 & xbox1 CPU & chipsets.
They are going to be taking a bath in red ink for their gfx division, and their CPU division hasn't made a profit in many years.

Highly doubt they will file for bankruptcy as well, they can't swallow that pill just yet.

 

[mrmt]

We will know soon enough, if AMD announces earnings growth, things will be fine, if AMD announces a loss of any amount... stick a fork in them, they're done. I would anticipate bankruptcy protection by years end.

Don't count on it yet. They still have some breathing room in the form of the revolver credit line, they still have GPU IP to sell, plus they can securitize the console contracts receivables... I think the question hanging is whether Lisa Su will pursue Rory's strategy and try to diversify the company or if she will transform AMD into an embedded company.

 

[jpiniero]

AMD won't file for bankruptcy because they would lose the x86 license. If (when) it gets to that point they would be selling off their assets and shutting down the company.

 

[GRAFiZ]

Of course it will be a loss, the only thing that is really selling well for AMD is the PS4 & xbox1 CPU & chipsets.
They are going to be taking a bath in red ink for their gfx division, and their CPU division hasn't made a profit in many years.

Highly doubt they will file for bankruptcy as well, they can't swallow that pill just yet.

Well, that's the most obvious thought. The earnings report is going to be bad... real bad, which is why Rory was forced out. The idea that anyone might believe this has been planned is confusing to me. The writings on the wall, this was not planned as it was exectuted. Look at the SEC filings. It doens't add up.

As for PS4 and Xbox, I'm curious to see their profit margin on those products. Does anyone have that information? Is it even public?

Don't count on it yet. They still have some breathing room in the form of the revolver credit line, they still have GPU IP to sell, plus they can securitize the console contracts receivables... I think the question hanging is whether Lisa Su will pursue Rory's strategy and try to diversify the company or if she will transform AMD into an embedded company.

This is a good point, they do have funds available to them, however, I don't think it would come in the form of traditional credit. Their debts to revenue margins are too poor. But, I might see external investors pumping the bottom line to continue operations.

I do however believe your last comment is correct, personally I expect AMD will desolve the vast majority of it's current product operations and focus specifically on one thing. Maybe APU, maybe GPU, maybe custom IP for very specific clients needs, who knows.

But I expect they will do that under the cover of bankruptcy protection.

AMD won't file for bankruptcy because they would lose the x86 license. If (when) it gets to that point they would be selling off their assets and shutting down the company.

Well, I don't know about that. I'm pretty certain they could build a recovery strategy around a future without x86 licensing.

Plus, I'm certain this has already been discussed, but:

http://news.synopsys.com/AMD-and-Synopsys-Expand-IP-Partnership

They don't really have IP value to sell off, theres no reason for anyone to shell out large amounts to buy it. Obviously they still have incredible value, they must, but will it be enough to continue trust with the investment community. That's the real key. A few years back they were given a rope to save themselves with, on the promise it would give them enough slack to turn it around. Now it's put up or shut up time and all it appears is that rope has become a noose.

 

[Phynaz]

Don't count on it yet. They still have some breathing room in the form of the revolver credit line, they still have GPU IP to sell, plus they can securitize the console contracts receivables... I think the question hanging is whether Lisa Su will pursue Rory's strategy and try to diversify the company or if she will transform AMD into an embedded company.

I'm expecting AMD to use bankruptcy to get out from under GloFo's thumb.

It's a business strategy, doesn't necessarily mean "we're broke".

 

[mrmt]

I'm expecting AMD to use bankruptcy to get out from under GloFo's thumb.

It's a business strategy, doesn't necessarily mean "we're broke".

It would be excellent for them to dump GLF, but AFAIK the cross-licencing agreement with Intel goes bust if AMD files for bankruptcy, and on top of that Mubadala is an important AMD shareholder, to the point they have a seat on the BoD, so I don't think that such decision would ever pass in the BoD.

 

[Phynaz]

Once you are in bankruptcy contract law no longer applies, bankruptcy law takes over. So AMD wouldn't lose their x86 license (at least not at first). I don't see a judge letting Intel put AMD out of business with a licensing claim. Especially since Intel needs AMD's IP also.

As far as Mubabdala, one seat on the board isn't going to do much to prevent it. In fact, since most bankruptcy deals are pre-packaged with creditors before filing, the board member would probably have to recuse himself from voting due to a conflict of interest. I would fully expect him to be a major influencer and negotiator though.

 

[frozentundra123456]

I don't see amd going bankrupt as long as the current generation of consoles is bringing in a reliable, if unspectacular, stream of income. However, if arm or Intel gets the next generation of consoles, I think they could be in serious trouble. By that time as well, dgpus will likely be in even more decline than they are now, so the dgpu division will not save them.

They better hope the new 2016 arm/Zen chip is on time and is everything the and fans are hoping for.

 

[hungtran]

Mubabdala probably forced Read out. Even though they care little about their AMD holdings, they care very much about the GF business. I don't see bankruptcy likely. Bond investors are usually more keen about these things than shareholders. The 2022 non-senior notes dropped in value but are still trading around par today. If bond investors felt bankruptcy was likely based on publicly available information it would have lost a lot more value. So unless your guess is based on material non-public information, i.e., accounting scandal, then I trust their guess better than yours.

 

[norseamd]

Mubabdala probably forced Read out. Even though they care little about their AMD holdings, they care very much about the GF business. I don't see bankruptcy likely. Bond investors are usually more keen about these things than shareholders. The 2022 non-senior notes dropped in value but are still trading around par today. If bond investors felt bankruptcy was likely based on publicly available information it would have lost a lot more value. So unless your guess is based on material non-public information, i.e., accounting scandal, then I trust their guess better than yours.

Does this seem like a valid scenario to the rest of you? I know nothing about these types of affairs and so I am wondering the general opinion. If this is true then I am very much worried.

 

[Ajay]

Don't count on it yet. They still have some breathing room in the form of the revolver credit line, they still have GPU IP to sell, plus they can securitize the console contracts receivables... I think the question hanging is whether Lisa Su will pursue Rory's strategy and try to diversify the company or if she will transform AMD into an embedded company.

I have a hard time seeing who AMD can sell their GPU IP to (maybe parts of it to Intel and/or NV, but not the whole lot). Diversification, IMO, is what lead Read's tenure to ultimately fail (though Papermaster had already designed the basic ARM strategy, IIRC).

It seems to me (and the layoff rumors point to this) that AMD is heading towards being a less diverse company. AMD cannot effectively maintain all business lines with a reduced budget and headcount (they can try, but this is an obvious losing strategy). With the slowdown in the international economy, AMD cannot rely on a rising tide to 'lift all boats'. I think they need to sink all their efforts into maybe two or three of their current five main areas (computing, graphics, embedded, enterprise and semi-custom).

As you rightfully alluded to, Lisa Su is still the acting SVP & GM of the the latter 3 from that list of which embedded is garnering the most revenue. Honestly, given the heavy competition in all areas, I don't envy the descisions she will have to make.

 

[Vesku]

I have a hard time seeing who AMD can sell their GPU IP to (maybe parts of it to Intel and/or NV, but not the whole lot). Diversification, IMO, is what lead Read's tenure to ultimately fail (though Papermaster had already designed the basic ARM strategy, IIRC).

It seems to me (and the layoff rumors point to this) that AMD is heading towards being a less diverse company. AMD cannot effectively maintain all business lines with a reduced budget and headcount (they can try, but this is an obvious losing strategy). With the slowdown in the international economy, AMD cannot rely on a rising tide to 'lift all boats'. I think they need to sink all their efforts into maybe two or three of their current five main areas (computing, graphics, embedded, enterprise and semi-custom).

As you rightfully alluded to, Lisa Su is still the acting SVP & GM of the the latter 3 from that list of which embedded is garnering the most revenue. Honestly, given the heavy competition in all areas, I don't envy the descisions she will have to make.

Going by Su's public statements they are trying to retrench as an embedded and IP integration company. Imo, I think she'd love to switch from making AMD x86 to making "BrandX" x86 SoCs on contract, i.e. expand the console deal to the whole industry. Good luck to her, in AMD's need to trim they've spun off a lot of their support engineering teams to other companies or laid them off. Many of the smaller chip IP companies operate with a lot of subcontractors and partnerships but it's bound to be difficult to manage as a company going from in-house to that structure due to financial woes.

 

[erunion]

You should probably read Anandtech's write up.

http://www.anandtech.com/show/8606/amd-appoints-lisa-su-as-president-ceo-rory-reed-steps-down

Seems like a puff piece. It repeatedly uses the term retire, I dont remember AMD using it in their press releases. Is that an assumption, or did AMD give AT special access for this?

 

[Homeles]

seems like a puff piece. Repeatedly uses the term retire. I dont remember AMD uses that in their press releases. Is that an assumption, or did AMD give AT special access for this?

AnandTech is a higher profile site, and therefore it is completely understandable for them to take stances that are less likely to stir the pot.

 

[beginner99]

Yea right :whiste:

http://anandtech.com/bench/product/191?vs=697

i5-760 vs FX-8350

i5-760 wins single-threaded test, FX obviously multi-threaded. For gaming it's a tie. The 2.8 Ghz i5-760 can easily be OC'ed to 3.5 if not higher. (note I have a i7-870 running at 3.4 Ghz with 0 voltage increase). All in all the FX is probably faster but the i5 is on 45 nm and 5 years! old. Yes, that is basically how far behind AMD is.

No back on topic. As long as AMD has resources for idiotic stuff like re-branding SSD's and such you can easily lay.off people without affecting R&D. As a CEO that would probably be my first action. Then lay-off all those useless in the middle "Task-Coordinators" that contribute 0 and make everything more complicated. Let's be honest. A lot of companies would be generating pretty much the same if not higher output if the right 30% of people were fired.

 

[AtenRa]

http://anandtech.com/bench/product/191?vs=697

i5-760 vs FX-8350

i5-760 wins single-threaded test, FX obviously multi-threaded. For gaming it's a tie. The 2.8 Ghz i5-760 can easily be OC'ed to 3.5 if not higher. (note I have a i7-870 running at 3.4 Ghz with 0 voltage increase). All in all the FX is probably faster but the i5 is on 45 nm and 5 years! old. Yes, that is basically how far behind AMD is.

The only benchmark the i5-760 wins is single thread Cinebench 10. Have a better look at your own link